South Bend-based 1st Source Corp. (Nasdaq: SRCE) is reporting third quarter net income of $20 million, down nearly 18% from the same period last year. The parent of 1st Source Bank says the drop is a result of the COVID-19 pandemic.
The bank says the drop was also due to an increased provision for loan and lease losses primarily due to “sizeable impairments.” The bank also saw a decreased net interest income due to lower loan and investment rates resulting from the Federal Reserve’s actions to lower interest rates and stimulate the economy in response to the pandemic.
Chief Executive Officer Christopher Murphy says, despite the challenges, the company is pleased with its overall results and efforts during the third quarter.
“Although our net income is down from the third quarter of 2019, we did see improvement from the second quarter 2020 while also providing $9.30 million to the reserve for loan and lease losses as we continue to work through the immediate and longer term negative impacts on our clients from the coronavirus pandemic. Continuing a positive trend from the first and second quarters, our residential mortgage loan business increased its production volumes and profitability enjoying the second highest quarterly volume in 10 years due to record low long term interest rates,” said Murphy.
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